Coronavirus chill hits Montana newspapers

HELENA — As the most consequential news story in a generation burns its way across Montana, newspapers large and small are feeling the coronavirus outbreak’s economic chill.

As of April 1, every large daily publication in the state is facing newsroom furloughs intended to help their companies survive the crisis, according to official announcements and internal emails provided to Montana Free Press by journalists.

Additionally, publishers and industry leaders say they’re worried the virus’ economic fallout could put small rural papers, many of them literal mom-and-pop operations, out of business entirely.

“It’s frustrating that the economics of news have come to this point, at a moment when people need more information than perhaps ever,” said Lee Banville, a journalism professor at the University of Montana. “The business now operates at such a razor-thin margin that shocks to the system translate almost immediately to effects in the newsrooms.”

In an immediate sense, Banville and others say, advertising-reliant news companies are reeling from a sudden revenue collapse as local restaurants, stores, and event venues shuttered by social distancing measures stop spending money on marketing. So while Montana news outlets are generally seeing record web traffic reflecting high public interest in the pandemic’s local impacts, that attention hasn’t translated into money to pay journalists.

In the newspaper industry’s pre-internet heyday, larger newspapers in particular operated with comfortable profit margins that helped them weather economic storms, Banville said. But as advertising spending has shifted to the internet — where advertising marketplaces are dominated by the likes of Facebook and Google — the newspaper business model has become increasingly fragile as it has traded print dollars for digital dimes.

“The revenue per reader online is a tiny fraction of the revenue per reader in print,” said Montana Newspaper Association Director Matt Gibson, who formerly owned the Missoula Independent and later served as the Missoulian’s general manager. “We just never had pricing power online.”

As such, newspapers in Montana and around the nation have experienced years of cutbacks, even amid the decade-long economic expansion that preceded this year’s coronavirus outbreak. Montana’s largest newspaper for example, the Billings Gazette, announced Feb. 19 that it was eliminating its head editor position and putting its newsroom under the supervision of a regional editor based in Butte.

The COVID-19 outbreak has put a fresh point on those challenges, with pandemic-driven cuts announced at newspapers across the nation. As of April 1, the parent companies of the daily newspapers that serve all seven of Montana’s major urban areas — the Billings Gazette, Great Falls Tribune, Missoulian, Bozeman Daily Chronicle, Helena Independent Record, Daily Inter Lake in Kalispell, and Montana Standard in Butte — had announced furloughs for at least some staff.

Davenport, Iowa-based Lee Enterprises, the publicly traded company that owns the Billings, Missoula, Helena, and Butte papers, as well as the Ravalli Republic in Hamilton, said March 31 it will require non-management employees to take two weeks off without pay before the end of June. Rather than be furloughed, company executives would take a 20% pay reduction, the company said.

“We go as our communities go. As many of our clients have temporarily closed, cut back hours and reduced spending, that affects our advertising, our largest revenue source,” Missoulian publisher Jim Strauss wrote in a column announcing the move.

“Benefits will remain intact during the furloughs and, of course, employees will be eligible for state and federal unemployment assistance,” Strauss wrote.

Gannett, the nation’s largest newspaper chain and owner of the Great Falls Tribune, said in a March 30 memo that reporters and editors earning more than $38,000 a year would be furloughed for one week a month in April, May, and June. A staff member in Great Falls said that day that it isn’t clear how many journalists in the paper’s newsroom earned enough to meet that threshold.

“We have a handful of papers that are tiny. They have a few hundred subscribers. Even a minor setback is enough for them to question their viability.”

—Montana Newspaper Association Director Matt Gibson

Additionally, Tennessee-based Adams Publishing Group, which owns the Bozeman Daily Chronicle, which covers the portion of the state so far hit hardest by the outbreak, said in a March 24 memo that it will cut employees and company executives back to 30-hour work weeks “in the hope of avoiding large-scale furloughs, staff reductions, and the like.” The company’s executives would be included in the furlough, the memo said.

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Chronicle editor Nick Ehli wrote the following day that the paper had been adding print and digital subscribers as its staff worked long hours to deliver COVID-19 coverage, but that local businesses adjusting to new budget realities has translated to less local advertising in the paper’s pages.

“I’d like to tell you that you won’t notice any changes, that we will be able to cover our community with the same vigor you’ve hopefully come to expect, but that simply wouldn’t be true,” Ehli wrote. “Reporters and photographers working 30 hours a week instead of 40 will produce less content. There is no way around that fact.”

And in Kalispell, a newsroom email provided to Montana Free Press informed staff that the Daily Inter Lake, owned by Coeur d’Alene, Idaho-based Hagadone Corporation, has implemented furloughs “across multiple departments” as a result of the pandemic. Editor Matt Baldwin said April 2 that the paper’s newsroom has partially furloughed two sports reporters and fully furloughed a part-time page designer and a full-time community editor for the month of April.

“There’s no doubt that these are difficult and unprecedented times, but the management team remains confident that we can get back on track quickly as soon as businesses reopen their doors,” Baldwin wrote in the newsroom email. “In the meantime, it’s incumbent upon us to continue covering this story with vigor.”

Newspapers in rural Montana, many published on a weekly basis, are also feeling the pinch, though many have so few employees they can’t reduce staffing without missing editions.

“These are people who don’t take vacations because there’s no one else to do the work,” said Gibson, the newspaper association director.

He’s worried, he said, that the outbreak could exhaust those small, community-owned weeklies’ resources.

“We have a handful of papers that are tiny. They have a few hundred subscribers. Even a minor setback is enough for them to question their viability,” Gibson said.

LeAnne Kavanagh, who runs a four-paper chain with her husband out of Cut Bank, said this week that they have decided to consolidate their weekly titles — the Cut Bank Pioneer Press, Shelby Promoter, Valierian, and Browning’s Glacier Reporter — into a single weekly edition for the time being. That decision, she said, saves their 14-employee company about half its usual printing bill.

With non-essential businesses shuttered and sporting events cancelled in the communities their papers serve, Kavanagh said, the papers are missing out on revenues normally generated by events like basketball tournaments and bank-sponsored Easter egg hunts. They’ve been working with clients as best they can, she said, adding special coronavirus-coverage pages and sections and creating more affordable opportunities for local businesses to keep their names in the public eye.

But even so, the Kavanaghs are competing with Facebook, with its lure of free business pages and cheap sponsored posts that can seem like a decent alternative for local storefronts, particularly in tough times.

“It’s just scary right now,” Kavanagh said. “For all businesses, not just ours.”

It isn’t yet clear how coronavirus-caused cutbacks might affect the quality of information produced during the crisis by the state’s daily newspapers, which provide the bulk of the original reporting produced in urban communities. That’s partly because it’s not clear how many reporters and editors will actually cut back their hours at a time when there’s vital work to be done, regardless of whether they’re getting a paycheck.

“Journalists don’t go into this business because they see it as an easy on-ramp to fame and riches,” Banville said. “How many of them are going to work probably 50 hours and get paid for 30?”

“We go as our communities go. As many of our clients have temporarily closed, cut back hours and reduced spending, that affects our advertising, our largest revenue source.”

MISSOULIAN PUBLISHER JIM STRAUSS

Even so, Banville said, government-provided information is only a partial replacement for journalism as it’s practiced at newspapers.

He pointed, for example, to stories profiling the first known Montana COVID-19 death, 77-year-old Jim Tomlin of Troy. That coverage, he said, brings home the impact of the pandemic and the import of anti-coronavirus measures with an emotional intensity a government press release can’t match.

“You need people who are asking questions that the community wants to know,” Banville said. “Journalists try to tell the total story instead of just relaying the information.”

As the pandemic exerts its grip on Montana’s economy, the state’s locally owned papers have the same short-term options available to other small business owners: emergency payroll loans and other provisions in the $2 trillion federal coronavirus relief act signed by President Donald Trump March 27.

It isn’t clear, however, whether larger newspaper chains will qualify for help under the act, which includes $500 billion for relief loans to airlines and other larger businesses. Specific guidelines for how that funding will be administered by the U.S. Treasury are pending.

“It’s almost the public media approach: ‘You rely on us and we’re in this together and we need your help,’” Banville said. “But that’s a big shift in the way the newspaper industry approaches its readers.”

(Montana Free Press, a 501(c)(3) nonprofit, operates on a similar model, soliciting reader donations and philanthropic support, and making its coverage available for free re-publication by other Montana news outlets.)

As Montanans seek reliable information on how the pandemic is playing out in communities far beyond the scope of national news outlets, Banville said, the COVID-19 crisis may well be a moment when Montana’s newspapers can prove their value to their audiences, winning goodwill and subscribers that can help them chart a path toward long-term viability.

“It has to be a question of, ‘Do readers value you and are they willing to pay for you?’ Not, ‘Are the ad dollars coming back?,’ since they’ve been declining for years,” he said.

Note: Montana’s newspaper industry is a small world. Montana Free Press is a member of the Montana Newspaper Association. Reporter Eric Dietrich previously worked for the Bozeman Daily Chronicle and Great Falls Tribune. Editor Brad Tyer previously worked for the Missoula Independent, both while it was owned by Matt Gibson and after its sale to Lee Enterprises. Montana Free Press is also actively engaged in editorial collaborations with news outlets across the state.

This story was updated April 2, 2020, to include more details about newsroom furloughs at the Daily Inter Lake.

This story is published by Montana Free Press as part of the Long Streets Project. This work is supported in part by a grant from the Greater Montana Foundation, which encourages communication on issues, trends, and values of importance to Montanans. Reach Lead Reporter Eric Dietrich at edietrich@montanafreepress.org.

Eric Dietrich

Eric Dietrich a journalist and data designer and the founder of the Long Streets economic reporting project. He has worked for the Great Falls Tribune, Bozeman Daily Chronicle, and Solutions Journalism Network. Contact Eric at edietrich@montanafreepress.org and follow him on Twitter.